If so, you need to be aware of this new law that just took effect.
The new year has finally arrived and so have some new laws. Beginning on January 1st, 2019, “those who divorce and pay alimony will no longer be able to take a federal income tax deduction for the [spousal support] that they pay,” cites the Detroit Free Press. While many couples felt pressured to get their divorce filed and finalized before the start of the new year, which put a significant amount of stress on divorce attorneys and mediators, there are plenty of others who didn’t quite make the deadline. And for those who didn’t, they will no longer be able to claim their alimony payments as a deduction on their taxes.
To help put the new law into perspective, here is an example of what you can expect if your divorce is going to be filed or finalized in 2019.
Let’s say the courts order you to pay anywhere between $10,000 to $20,000 a year in alimony to your ex-spouse. Instead of the amount you pay in alimony reducing the amount of taxable income you have, it will now become taxable income, which could lead to you having to pay the IRS a few hundred or even a few thousand dollars back in taxes. While PBS.org says that the new law “stands to be the biggest dividing issue in divorces in 2019,” the government doesn’t seem too bothered by the change as it has been estimated that it will “raise $6.9 billion for the [it] over next 10 years.”
Will those who finalized their divorce in 2018 lose their alimony tax deduction?
PBS.org stated that those “who already divorced will be grandfathered in, but if [they were to modify their agreement in 2019] or beyond, they could be subject to the new rules too.” Basically, if your divorce was finalized in 2018 or before, you will still be able to claim your alimony payments as a tax deduction. However, going forward, if you were to decide to modify the existing agreement you have, you will want to keep an eye out for any clauses that stipulate your new agreement will be subject to the new laws.
If you’re considering filing for divorce in the state of Michigan in 2019, here’s why it is essential you hire a MI divorce lawyer.
Given the new law and how it affects taxes, you can expect that those who choose to file for divorce in 2019 will likely seek to have their alimony payments set low. But the fact is, just because alimony can no longer be claimed as a tax deduction doesn’t mean the party seeking the support should be subject to having the amount they are entitled to, lowered. Therefore, to ensure you have someone who will protect your interests throughout the duration of your divorce and help you obtain the spousal support you need, it is best you retain an experienced divorce lawyer as soon as you decide it is time to file the paperwork.
Lansing, MI divorce attorney Stuart R. Shafer has a great deal of experience in handling divorce cases and has helped various clients collect the spousal support they not only need, but also deserve. If you want to be sure you obtain a favorable outcome in your divorce case, contact our office today.
You can reach the Law Offices of Stuart R. Shafer, P.C. at:
1223 Turner Street, #333
Lansing, MI 48906